The social side of investing ?

vincentsa · #1 (**permalink**) 09-03-2009, 06:58 AM

I was chatting with my future father in law the other night. He has worked hard all is life and has always invested his money wisely without expecting huge returns rather let the compound interests do the job.

What I found interesting was his view about the social impact investing has on society.

He was not referring to investing in socially conscious companies or hedge funds, but rather the fact that the sole action of investing into ANY company will indirectly create jobs and wealth for society as a whole.

I would like to know what fellow social edge members think of his view. Is it too simplistic, or is it a plain fact that can be proved using economics theory?

So what’s your view?

vincent

brian · #2 (**permalink**) 09-03-2009, 04:07 PM

Sounds like someone doing homework.

vincentsa · #3 (**permalink**) 09-03-2009, 08:39 PM

sorry what?

I am just trying to get a conversation starting ... no home work, really

sapphirecapital · #4 (**permalink**) 09-05-2009, 02:44 AM

investment has always social repercussions, some good some bad, thats why there are basic laws but generally if greed is the overwhelming factor of the investment, than I guess there is some anti-social factor in it, but frankly investment needs incentive as well

kenyantykoon · #5 (**permalink**) 09-06-2009, 05:17 AM

i didn't know that there was a social side to investing. is that what they call capitalism this days? making a business and then when it profits you "give back" to the community and elevate the community? a duck by any other name is still a duck

sapphirecapital · #6 (**permalink**) 09-06-2009, 02:43 PM

you did not know that whatever you do has a reflex reaction in your surroundings? living on an Island Robinson? Kidding aside it has nothing to do with changing the name of a duck, even Karl Marx has thought about it (even if they are somewhat directed by his willingness to oversea other forces in society) On the social side however there are systems which temper the forces of capitalism with a social factor, in the US they are seen as socialist but look at Germany, it has its faults but also more balance, look at California which is trying to balance but cann't get a grip on money matters and than Texas where there is no social net whats so ever.

Vytautas · #7 (**permalink**) 09-29-2009, 06:14 PM

It sounds to me like you've stumbled on some general economic theory. It's pretty simple, there are two basic groups of people out there. One group has extra money and the other group needs extra money. This can be due to many reasons, one group(person) may be saving for retirement or college while the other group (person) could be starting a small business.

The institutions we have in place (banks, stock markets, etc.) allow the people that need money to get it from the people who are saving it (rather than the money going to waste).

So you're right, it does help expand the economy because rather than stuffing the money under a mattress, someone may be putting it into their 401k which is then put into stocks or bonds (or a mix) which help capitalize business ventures.

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